To add an exclamation point to Brad Wilmouth’s great post last night at NewsBusters (“ABC Pushes for Tax Hike on Capital Gains, Ignores Likelihood of Tax Revenue Loss”) — in ignoring the likelihood that raising the capital gains tax rate would reduce capital gains tax collections, the network also “somehow” forgot now-retired World News Tonight anchor Charles Gibson’s aggressive questioning on the topic during an April 2008 Democratic Party presidential debate.

That night, ABC, represented by Gibson and George Stephanopoulos, who was then the host of ABC’s Sunday morning news show, drove leftists crazy (noted at the time in NewsBusters posts here and here), because, as NB’s Brent Bozell noted, “For once it veered from liberal orthodoxy.”

One of Gibson’s “veers” consisted of questions he asked presidential contenders Barack Obama and Hillary Clinton about capital gains taxation. The now-defunct New York Sun characterized it as “Gibson’s Finest Hour” (I would suggest that it might really have been “Gibson’s Only Fine Hour”), and wrote it up thusly (internal link added by me; bolds are mine):

… for a few moments in yesterday’s presidential debate on ABC News, anchorman Charles Gibson sounded like a charter member of the Club for Growth or Americans for Tax Reform. It came when Mr. Gibson questioned Senator Obama about the capital gains tax. Mr. Gibson quoted Mr. Obama as talking about raising the tax to 28% from 15%. “But actually, Bill Clinton, in 1997, signed legislation that dropped the capital gains tax to 20 percent,” Mr. Gibson said. “And George Bush has taken it down to 15 percent. And in each instance, when the rate dropped, revenues from the tax increased; the government took in more money. And in the 1980s, when the tax was increased to 28 percent, the revenues went down. So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected?”

Why, Robert Bartley couldn’t have put it better himself. Mr. Obama was totally flummoxed, betraying a fundamental lack of understanding of the Laffer Curve. The Democrat of Illinois spoke of the need to “finance health care for Americans who currently don’t have it,” and of the need to “invest in our infrastructure” and in “our schools.”

Mr. Gibson, to his credit, wouldn’t let the point go. “But history shows that when you drop the capital gains tax, the revenues go up,” he replied to Mr. Obama. Mr. Obama replied by changing the subject, to “a housing crisis that this president has not been attentive to.”

Mr. Gibson tried the same question, more or less, on Senator Clinton. She, at least, disavowed raising the capital gains rate above 20%, ruling out a return to the 28% rate contemplated by Mr. Obama. But when Mr. Gibson pressed her on why she would raise it at all, she went into lunk-headed, static analysis mode, displaying a lack of understanding as severe as that afflicting her rival. “You know, Charlie, I’m going to have to look and see what the revenue situation is,” she said.

The Tax Foundation has a transcript of the exchange. The following segment from it is worth excerpting, given the fiscal circumstances largely created as a result of Obama administration policies during its first two years (bolds are mine):

OBAMA: And you can’t take out a credit card from the Bank of China in the name of our children and our grandchildren, and then say that you’re cutting taxes, which is essentially what John McCain has been talking about.

And that is irresponsible. I believe in the principle that you pay as you go. And, you know, you don’t propose tax cuts, unless you are closing other tax breaks for individuals. And you don’t increase spending, unless you’re eliminating some spending or you’re finding some new revenue. That’s how we got an additional $4 trillion worth of debt under George Bush. That is helping to undermine our economy. And it’s going to change when I’m president of the United States.

GIBSON: But history shows that when you drop the capital gains tax, the revenues go up.

OBAMA: Well, that might happen, or it might not. It depends on what’s happening on Wall Street and how business is going. I think the biggest problem that we’ve got on Wall Street right now is the fact that we got have a housing crisis that this president has not been attentive to and that it took John McCain three tries before he got it right.

In addition to Gibson’s grilling on cap gains, both he and Stephanopoulos did a creditable job of pushing Obama on the substance and relevance of his relationship with the Rev. Jeremiah “God D**n America” Wright, and in giving Mrs. Clinton opportunities to pile on. This of course drove the left even further over the edge.

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While questioning Barack Obama about his proposal to raise the capital gains tax Gibson claimed that when the rate has been cut government took in more money but when the tax was increased revenue fell. Although this argument warms the hearts of the Wall Street Journal editorial page the implication that capital gains tax rate cuts raise revenues is not supported by the evidence. Although most studies find that higher rates reduce realizations of gains that does not mean they cut revenues.

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